Seoul (Korea Economic Daily) – At a meeting held at IKB Securities’ headquarters in Seoul on the 22nd, Director Jung Yong-taek of the IKB Securities Research Committee discussed the risks and countermeasures that could arise from a potential surge in U.S. Federal Reserve interest rates affecting the Korean market.
Director Jung said that if U.S. rates were to rise sharply above 5.2%, domestic equity and other risk‑asset investments would likely lose much of their appeal. He emphasized that a crisis similar to the SVB situation could occur, adding that “if such a risk materializes, it is natural for the share and bond allocation to shift toward safer assets.”
He further noted that while the Trump administration’s short‑term rate‑cut policy may bring temporary benefits, the long‑term outlook suggests higher rates will persist. He urged that, although the Fed’s current rate‑cut measures are not decisive, Korean investment strategies must adjust share and bond allocation to guard against risk.
Together with these points, Director Jung added that a sharp rise in U.S. market rates could weaken the attractiveness of risk assets, so the domestic asset market needs prudent countermeasures. He concluded that institutions such as securities firms should adjust their share‑bond mix to provide investors with more stable choices.